Gold Premiums Double In India As Demand Outstrips Supply

Gold premiums doubled in India on Wednesday as suppliers struggled to meet surging demand after a ban on consignment imports, even as futures prices fell to their lowest in more than a month. As Reuters notes, India, the world’s biggest buyer of gold, now requires importers to pay upfront for inventory, making it difficult for smaller jewelers with lower working capital to source supplies. The government also raised the import duty to 8 percent in May to keep a lid on the surging current account deficit.” There may be some demand from jewelers for raw material,” said Bachhraj Bamalwa, former chairman of All India Gems and Jewellery Trade Federation, adding that premiums charged on London prices shot to $20 an ounce on Wednesday from $8-$10 on Tuesday.“We are unable to supply, though there is demand… we give deliveries after 2-3 days,”